The big picture
We will know official numbers semi-shortly as the 2020 census rolls out, but Cushman and Wakefield data on DFW from 2010 to 2019 showed 1,349,378 new residents. If you break that math down, that’s 134,937.8 new residents per year, which is 370 (rounding up) new residents per day across a full decade. That’s intense. How intense? It was first among U.S. metro areas for new residents in that time frame. (I moved to DFW in 2014, so I am officially a statistic for this article.)
Hold onto your hats, too: Cushman says 1,393,623 are coming between 2020 and 2029. That’s based on advanced data modeling and the number could be way off -- we don’t know what societal factors will happen in the next decade, nor where job growth will and will not occur -- but the number seems reasonable. That 2020-2029 number is about the current population of Oklahoma City, so we’re essentially adding Oklahoma City to the Metroplex in the next decade, give or take.
The 2020-2029 number would be a population growth rate of 17.9%, which is actually lower than the 20.9% represented by 2010-2019. If you believe all these numbers and the modeling, the total population of the Metroplex in 2030 would be somewhere between 9M and 9.5M. The population of Chicago is about 9.46M, and that number barely increased from 2010-2019. Theoretically, then, DFW will become the third-largest metro area in the U.S. (behind NYC and LA) sometime in the next half-decade to a decade.
Where are these people coming from?
The conventional narratives on this would be:
Corporate relocations. There is legitimate data for this argument, plus anecdotal moments we can see with our own eyes -- like Toyota coming into the Frisco area. In fact, here’s a full list of 2019 relocations and expansions in DFW.
California: This is a common theme, and potentially a good chunk of 700,000 Californians have ended up somewhere in Texas. (That’s not just DFW, and many Californians prefer Austin as a Lone Star destination.)
Other countries: This is a big factor.
The Northeast: This doesn’t get as much attention as California, but many people are exiting the I-95 corridor, largely due to cost of living. Census estimates at that link are saying about 412,000 people moved from the Northeast’s main corridor to “the South” over the last decade (I was one!), with a good chunk of “the South” being people who ended up in Texas.
OK, so what does this mean for housing?
Right now there are about 774,000 rental units in DFW. About 90-95% of them are going to be 1BR or 2BR, so there’s no way we can currently house 9M people through apartment rental units. The math just isn’t there. We are building like crazy, and 2020 will see a lot of development as people want to get projects in before a Presidential election potentially changes the economic landscape. It seems reasonable that we’d surpass 1M apartment rental units sometime this decade. But even if every single one of those was a 2BR housing exactly 2 people, we’d still be massively short.
Putting aside the complexities of affordable housing (which we covered at a high level here), right now about 60% of DFW are/is homeowners. More and more people are renting -- that number keeps rising -- and the profile of the renter has shifted to older and richer, for many different reasons. The core reason for the uptick in age/wealth among renters is that people sell, but can’t immediately get back into the same neighborhood as buyers off their gains from the sale, so they end up renting. The main reason for the overall rental rate being higher? A lot of those corporate relocations we discussed above involve employees who aren’t yet ready to buy, so they go rent -- and broader issues with student loan debt are causing more people to delay their initial home purchase as is.
So what needs to happen in the next decade?
Again, this is a complex macro issue and we cannot solve this thing in this post. But broadly, what needs to happen is this:
We need to continue developing apartment complexes, ideally in areas close to where jobs are being created.
We need to begin to see the effects of the Boomer-to-millennial-and-Z “wealth transfer” to aid with debts and potential first home purchase.
We need to continue to lure relocations and have an educated, tech-friendly workforce.
We need to make sure we’re at the forefront of different initiatives around affordable housing. (Public-private partnerships, etc.)
Meanwhile, per this Cushman data, the No. 2 growth area (projected) for 2020-2029 is Houston, and the No. 9 growth area is Austin, with San Antonio in the top-12. So the influx shall continue. DFW just needs to keep managing its role in the socioeconomic migrations of this country.